How I Saved 30 Percent of My Income in 2017

Email your money conundrums, from the technical to the psychological, to moneymom@nymag.com.

It’s been a stressful year — maybe you’ve noticed? But if constant anxiety has a silver lining, it’s the urge to double down on what we can control. In that spirit, I managed to save approximately 30 percent of my income in 2017. This is uncharted territory for me; I’ve always had a fascination with how other people handle their money, but I’ve never been disciplined about my own finances — until now.

This disparity isn’t unusual: Most of us know what we’re supposed to do with our money (live within our means, invest for the future), but have trouble motivating ourselves to follow through with it. How can we make ourselves wantto spend less and save more, without it feeling like such a grind? Here are the five practices that helped me create — and keep — better habits in 2017.

1. Cut back on easy spending

I got through my 20s with a carpe-diem approach to money, embracing every opportunity to open my wallet: travel, restaurants, sample sales. Whenever finances got hairy, I resolved to rein myself in, but it wouldn’t last. Then, about a year ago, I interviewed Manisha Thakor, the director of wealth strategies for women at the BAM Alliance, and she made an interesting recommendation: Comb through all of my expenses — even the tiniest ones — and highlight the ones that “brought joy.”

Cheesy though it sounded, I gave it a try. There were quite a few pricey things on the “happy” list: a new dress, wine and groceries for hosting book club, yoga classes, train tickets for a weekend trip, donations to causes I cared about. However, there were many that weren’t: sandals that pinched, a few Seamless orders I barely remembered, cocktails I definitely didn’t need. The lesson, of course, was that I was wasting a decent amount of money on unnecessary stuff that I didn’t even like.

Every month since, I’ve scrolled through all of my charges and made a mental note of the greatest hits — the ones that genuinely enriched my day-to-day. And now, when I’m contemplating an expense, I ask myself, “Would I highlight this a month from now?” Obviously, it wasn’t a cure-all, and you can’t always predict if a purchase will turn out as “joyful” as it seems in the moment. But it did train me to spend less without feeling like I was giving up anything.

2. Try “text banking” for balance reminders

I used to dread visiting the ATM. My balance was inevitably lower than I anticipated, sending me into a tailspin of self-doubt: How could I be so careless? Even as I’ve grown older and more conscientious, it’s rare that I have a solid sense of how much money is where — it’s like I have amnesia for numbers. This year, however, I signed up for “text banking” with Bank of America, and now receive a message with my account balances every single morning (many other banks offer similar services). This not only knocked into my hard skull exactly how much money I had at all times, but it desensitized me to the panic of finding out. It also made me nerdily eager to pay off my credit-card balances immediately — even if that meant settling up multiple times per month — just so I knew that the number in my checking account was “real.” Rudimentary? Sure. But it helped establish a much firmer sense of control of my day-to-day finances, and dispensed of any lingering denial about my spending habits, good or bad.

3. Automate to force yourself to save

I save most effectively when I don’t save at all, which is to say, I get the internet to do it for me. Automating regular deposits into a savings account is nothing new (and useful, for many people), but it hasn’t always worked for me; I’d still know that money was available, and tap into it regularly. So this year, I experimented with more creative ways to hide money from myself. One tool I’m obsessed with (and have raved about before) is Digit, an app that came out in 2015. Once you connect it to your bank account, its algorithm tracks your cash flow and removes small amounts of money when you won’t notice — a couple of bucks here and there. You can withdraw whenever and whatever you want, but I’m much less likely to pillage the account because it’s out of sight, out of mind.

There are other apps that do similar things (Qapital is popular), but Digit is the sneakiest and therefore my favorite, even though it did start charging users $2.99 per month earlier this year. Still, I’m willing to pay for algorithmic (and FDIC-insured) elves to trick me into saving — and, on a broader level, it made me realize that I have more to spare than I thought.

4. Take your 401(k) seriously

I maxed out my 401(k) and IRA contributions this year, an achievement I’d never even come close to before. I decided to go for it at the end of 2016, after I rolled over all of my previous 401(k)s into an account at Vanguard and discovered what a slacker I’d been about retirement savings in my 20s. I’m now in my early 30s, don’t have kids or a house or consumer debt, and make enough money to live comfortably, so I figured it was about time to start atoning for my younger self’s lack of foresight.

The maximum amount that anyone under 50 can put into a 401(k) per year is $18,000; for an IRA, it’s $5,500. I decided to aim to hit the maximums by August, so that I could reward myself with “bigger” paychecks afterward. (My thinking: Research shows that monetary incentives do motivate behavioral changes, and it gave me something to work toward. Plus, the alternative — simply lowering my paycheck in perpetuity — seemed depressing.) Leading with aggressive contributions also gave me a cushion: I could dial them back slightly if I needed to without missing my target by the end of the year. One month, I put in a little bit less so that I could pay for a trip, but then I made up for it (and then some) when I took on extra freelance work a few months later.

When I hit the max in September, I felt like a zillionaire. However, I’ve since learned that my supposedly clever system of front-loading my contributions wasn’t as smart as I thought.* My company has a relatively generous 401(K) match (dollar-for-dollar up to four percent of my salary), and by front-loading my contributions, I lost out on three months of “free” matched money. What can I say—I’m new at this, as I’ve mentioned, and never liked math. Take advantage of any matching program you have, and don’t make my mistake.

5. Dangle a carrot in front of yourself

This coming January, my husband and I are taking a long trip to South America that we’ve been planning for ages. Several behavioral psychologists — notably Brad Klontz, the co-founder of the Financial Psychology Institute — have told me that saving up for a concrete goal that I genuinely look forward to is a great way to prevent mindless spending on random stuff in the interim, and they couldn’t be more right. I found myself comparing every possible purchase to what it could buy us on our trip: A nice dinner out in Tribeca, or one in Paraguay? A fancy haircut, or a hotel room with a view in Panama City? I once returned a new pair of boots when I realized that they were the same price as a plane ticket from Barranquilla to Medellín. Through this lens, refusal didn’t seem like deprivation — it felt like a treat to my future self.